Minneapolis approves ‘landmark’ paid sick leave law

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The Minneapolis city council — meeting Thursday as the committee of the whole — gave unanimous approval to an ordinance that will get formal approval Friday.

Minneapolis has become the first city in Minnesota to require most employers to offer paid sick leave to workers.

It probably won’t be the last. On Friday, Minneapolis city council gave unanimous approval to an ordinance that creates a mechanism by which the city will enforce paid sick leave rules on workplaces of six or more employees.

In an amendment to the ordinance that was included by the council’s committee of the whole on Thursday, the city will also require that smaller workplaces allow workers to accrue and take unpaid leave for illnesses, medical appointments or to care for sick family members.

Just five months after an acrimonious city budget debate that left the council divided, the 13-member council has now mustered unanimous support for a pair of policies many members called historic. The paid leave plan follows by less than a month the unanimous adoption of a 20-year funding plan for parks and streets.

On Thursday, Mayor Betsy Hodges called the paid leave ordinance a “landmark measure,” saying the lack of paid sick leave is a public health issue, and that the lack of paid leave falls most-heavily on lower wage workers that are predominantly women and people of color.

“We know we need to build a workforce of the future, but we also need to build a workplace of the future,” Hodges said.

After the council’s committee of the whole spent nearly two hours working through amendments to the ordinance Thursday — most of which passed unanimously and none with more than a single ‘no’ vote — council members praised just about everyone who had touched the issue. As with the park and street vote, some council members saw the process for getting the ordinance done as a recipe for working through future controversies.

“My heart is pounding right now,” said Council Vice President Elizabeth Glidden, who is chair of the committee of the whole. “This is one of the most impactful things that we have been part of ever.”

Council Member Lisa Bender said she was proud of the city and the council. “We have created a huge new protection for workers in our city,” she said. Council Member Andrew Johnson noted that the city isn’t the first in the nation — in fact a few dozen cities, counties and states have acted before Minneapolis — but he said it will be the first in Minnesota. That could lead the way to other cities and perhaps the state adopting paid sick leave.

“I am hopeful that Minneapolis taking on this ordinance will help, along with St. Paul, Duluth and other cities, will help propel action at the state level,” he said.

A long path to passage

Council Member Cam Gordon reminded the council of events last fall when a first run at sick leave and other worker protections ended in failure and disappointment. The controversies were less about paid leave and more about the other planks of what was dubbed the Working Families Agenda. Also in that package was a proposal to require that employers give workers advance notice of their work schedules, with penalties for those who did not.

“When we did that we revealed a divide, a disconnect that was going on in the city between some of the businesses,” Gordon said. “The council was caught in the middle.”

The “fair scheduling” provision was dropped due to opposition from business — both large and small. While supporters expected pushback from big employers and chambers of commerce, they were not ready for complaints from small retailers and restaurant owners. And while the paid leave plan drew less opposition, the council and Hodges decided to send it to a work group that included business, trade group, union and worker representatives.

The Workplace Partnership Group had a dozen public hearings and spent two months working through the issues. The final ordinance expected to be approved Friday draws heavily from the work group’s report. Gordon said the process sets the council up well to take on hard issues in the future”

The details

Under the ordinance, employees in workplaces with six or more workers would be allowed to accumulate one hour of sick leave for every 30 hours worked, topping out at 48 hours of accrual each year. Workers could rollover unused sick leave from one year to the next until they accumulate 80 hours. That leave could be taken when the worker or a family member is sick; for physical and mental illnesses or injuries; and for medical appointments. In cases of domestic abuse, sexual assault or stalking, time could be taken for treatment, counseling, relocation or legal proceedings.

The ordinance will take effect on July 1, 2017 but has a phase-in for enforcement. For example, a first offense for any employer not adhering to the rules during the first year of implementation, from July 1, 2017 to June 30, 2018, would not incur a financial penalty other than reinstatement of improperly withheld leave pay for the worker. Second offenses in the first year — as well as any offenses in the second and subsequent years — could result in fines and penalties.

An employer would not have to be based in Minneapolis to be subject to the ordinance, nor does the law only cover workers who have a regular workplace in the city. A delivery driver or repair person who moves into and out of the city during a work day would be able to accumulate paid leave for each hour worked within the city. There is a threshold, however, for eligibility: a worker who spends fewer than 80 hours working within the boundaries of Minneapolis in any given year would not be covered.

MinnPost photo by Peter Callaghan

Members of the Workplace Partnership Group in attendance during Thursday’s committee of the whole meeting. From left to right – Ron Harris, vice chair Jim Rowader, chair Liz Doyle and Chelsie Glaubitz Gabiou.

The ordinance wouldn’t allow employers to make an employee’s use of the leave conditional on the worker finding a replacement for themselves, or on the employee arranging to trade shifts with another worker. But it would allow employers to require documentation for a worker to use more than three consecutive leave days.

Employers who already offer paid leave in excess of what is required under the ordinance would not have to offer additional days. Policies that exceed the minimums will be deemed to be in compliance but the council Thursday asked city staff to flesh out the details of how to judge whether a private plan satisfies the city standards.

The city’s civil rights department will enforce the ordinance and handle complaints, which could be brought by a worker or anyone else. Employers would be required to maintain employment records for three years and would be deemed in violation of the ordinance for refusing to make those records available to investigators. Appeals would go through hearings officers and then state courts.

Key changes

In addition to technical amendments and clarifying language, there were some substantive changes made at the meeting Thursday. An amendment adopted by the committee added back in a recommendation of the work group: that employers with five or fewer employees be required to offer unpaid leave and not punish workers who make use of such leave. The council clarified Thursday that businesses that are licensed by the city put those licenses at risk for repeated violations. That too was in the work group recommendation.

The council also created a special provision for new businesses, regardless of size, that would allow them to forego offering paid leave for the first year of operation, though unpaid leave would still be required of those businesses. And the council added an additional reason for using paid and unpaid leave: to care for a family member whose school or place of care has been closed due to bad weather. That would include a child’s school or an elderly parent’s adult day care.

The council also approved a direction by Council Member Abdi Warsame for city staff to create a small business compliance program to help small businesses — especially those started by recent immigrants — understand and follow the new ordinance. He said that and other amendments will “help me go back to my community and champion this, to say it helps all of us” and to tell businesses that “the sky will not cave, we will go on.”

While the ordinance had support from some business organizations, such as the Main Street Alliance, it was opposed by others, including the Minneapolis Regional Chamber of Commerce and the Minneapolis Downtown Council, both of which objected to the mandatory nature of the program. Though that provision remains, Hodges and some council members say they made changes to the ordinance in response to some concerns.

“I know this will be a big change for some people,” Hodges said. “I know it will be an adjustment. I will continue to work with businesses and workers to make sure this is implemented in a way that works for everyone.”

Comments (28)

It’s good to see Minneapolis leading the way and promoting benefits that benefit the poor and working people of our state. If only more politicians would walk the walk and help out people at the lower end of the scale instead of the upper end.

Did I miss something in the article? Who and what agency is going to enforce this new law. The other thing I am interested in is what type of a financial impact will this have on small employers. Having worked in Human Resources for over 25 years and being very familiar with FMLA and sick leave plans, it is my initial feeling that this plan will place a huge administrative burden on very small employers who do not have the administrative ability to keep the required records. It also doesn;t appear to me to be any requirements that the employee shows a medical need for the sick leave, such as a doctors notes. I would love to see MN POST publish the city council’s financial studies on the impact to small businesses. My opinion is that this is going to turn into a nightmare of bookkeeping for many small businesses. Look for some to move to the suburbs.

I see one of three things happening: Businesses will close and move, businesses will make economic changes eventually affecting the customer, and unemployed will have less job opportunities as business reacts.

I wouldn’t worry too much. The business owners who would move out of MPLS over this have already moved to So. Dak. because of the tax increases the state passed a couple years ago. it must have been So. Dak, because Walker’s economy is still stuck in the mud so ya know they didn’t move there.

If you’re paying employees by the hour, then you’re tracking their hours already. If you’re not using a Quickbooks-type program or a payroll service already to do your payroll, a simple spreadsheet would track this pretty easily.

I’ve apparently become an old liberal, left behind by progressives who believe government is better equipped to dictate conditions of employment than employees and employers are to negotiate them. Or is it that today’s employees have been convinced by anti-union forces that collective bargaining has no place in America?

Either way, it’s the workers who stand to lose in the long term, as the political pendulum reverses course.

“Or is it that today’s employees have been convinced by anti-union forces that collective bargaining has no place in America?” That’s a big part of it. Employers have succeeded by doing with propaganda what the Pinkertons tried to do with clubs. The relentless campaign against public employee and teachers’ unions is motivated by a concern that other employees will try to emulate their unionized counterparts and bargain for better wages, paid sick days, medical insurance, etc. Breed envy and scorn, and the right to bargain collectively will stay unused.

Also, many unions are reluctant to spend the time and resources to organize, and then represent, smaller bargaining units, especially units of lower wage workers who may not stay in the same job for long. Workers’ associations or alliances, groups not affiliated with a national union, are a reasonable alternative, but getting the word out about them is a challenge.

The old system of collective bargaining has collapsed. When Taft-Hartley was passed in 1947, most of labor’s best tools for organizing were made illegal. It was that, and not Ronald Reagan, that started the long slow decline of labor, and with it the ability of employees to collectively bargain. While the spirit of the NLRA is to allow employees to choose representation free of employer interference, the letter of the law gives employers many tools to delay and deny the democratic majority will of a workforce that wants to collectively bargain.

Just one example, if an employer illegally fires an employee for protected activity, the employer can easily delay a Labor Board judgement for over a year. Once a ruling is issued against an employer and back wages are ordered, the employer gets to deduct any earnings the employee has earned in the intervening time. And the aggrieved employee is required to seek and accept work while waiting for the lengthy legal process to run it’s course. Meanwhile, the former co-workers all remember that Joe wanted a union and lost his job because of it.

The MPLS city council is not undermining the ability of employees to collectively bargain. An employer dominated economy accomplished that long ago. Should the city council live in the past?

One appreciates the detail that Mr. Callaghan provides in this article. He lets us in on how deliberative and thoughtful the City Council has been on this part of the city’s fight for equity, how they have tweaked and re-tweaked the ordinance to address all but the most knee-jerk of business anti-worker rhetoric. This is on of the reasons why so many of us who weren’t born in Minnesota moved to the progressive Twin Cities!

As we know from another MinnPost essay of several days ago by a former Minnesotan who is now a small business owner in New Jersey, the sky does not fall when businesses–even small ones, and much less larger ones–institute paid sick leave to their hourly employees. We hear the same, tired false claims from business, that reduce to the fact that they do not prioritize providing fair working conditions for their employees.

Not sure this one makes much of a difference one way or another. Employers will, over time, adjust pay to compensate for any additional costs due to sick time. If it costs them money there will be less to distribute to employees. It may effect a few businesses on the edge of viability who can’t deal with a small increase in labor costs for the year or two it would take to make the wage adjustments needed to pay for the new policy.

Very quickly an employees total compensation will readjust to be at the same level. The only difference is that they will have had a reduction in their take home in trade for access to sick days. Of course there will be the administration costs both for the employer and city agencies to cover. People, if they had so chosen, could have set aside a small amount of money out of each pay check to put in to savings to cover the same type of shorter lines this law is concerned with. This law basically mandates that their employer do it for them..

Since many of the people effected by the sick day law don’t earn minimum wage increasing it won’t change anything about what I stated for them. But basically the same thing will happen to those who do earn minimum wage though the adjustment period will be longer and more complex.

Employers (or managers tasked with balancing department/shop/restaurant budgets) can’t make extra revenue magically appear to pay for increased wages weather that is in the form of sick days or hourly rate. That means the only way to deal with increased labor costs is to increase prices. What happens after that is very dependent on the individual businesses at hand. A widget making factory will need to deal with the fact that their brand of widgets may be less competitive in the market due to higher prices. Same force that means so much manufacturing heads overseas, lower cost labor.

For service industries that can’t move the local population will simply need to pay more for those services. Since businesses don’t charge on a sliding scale the price increases will be felt more acutely by those on the lower end of the income scale since paying $2 more per bag of groceries is hardest for them. This is especially true given that most minimum wage service work is done at the places most patronized by those with the lowest income. Also those on the low end of the income scale spend most of their money on necessities and can’t simply choose to not make the purchase. The truly wealthy can already afford levels of services that already demand a higher level of pay or can choose to not make the purchase.

Beyond the direct price increases seen due to increased labor costs other costs will creep up as well. Housing that is most available to the people earning minimum wage will go up as well. This will take a bit of time since turn-over happens slowly but within a year or two or three it will be right back at the same relative level. Same with inexpensive used cars, education and a multitude of other items.

The other effect will be structurally higher levels of unemployment, especially among young people, like there is in Europe. Higher base-line labor costs mean mean that to increase productivity employers will look to fill positions with people who want the jobs for the long term and aren’t seasonal or part time. So young people will have more difficulty getting jobs and when they will get out of college (if they go) they will be more in debt and less experienced making it harder to get going as productive adults. Some work that has very limited marginal value and where productivity can’t be increased will simply stop being done. Reducing supply and increasing its price to cover the increased cost of labor.

The group that will get pinched to the degree these policies help those on the bottom is the middle class. Their wages won’t increase due to the policies and may even see slower gains if their employers need to shift some revenue away from their salaries to pay for the increased low end labor costs. Meanwhile the prices they pay for basic items will increase.

So while the string of effects around minimum wage is more complicated it isn’t really any more effective than the sick-day policy because it doesn’t change the fundamentals that determines the value of the work being done. On top of that any marginal change in income distribution to the bottom end will be eaten up to some degree by the costs of managing the policies meaning that in the long run people will likely be worse off. Unless you are one of the people paid to manage the policies, in the public or private sector, or part of the political class making their way based on feel good talk. While the policies may show some small effect in the intended direction for a short period of time they don’t change the fundamentals because the people that design them don’t seem understand or choose to ignore the fundamentals.

This is going to be an accounting nightmare for electricians and plumbers who are not based in Mpls, but have clients there. They now have to keep track of the hours each employee works in the city to compute sick leave????

Wait till St. Paul passes their own separate rules. Then what???

This is idiotic. If you want these kind of rules, they should be state wide.

We use mobile software that tracks our time spent on a job site to the minute, as well as our physical location at all times. Nearly every service provider I see on a daily basis is using something similar, or is in the process of coverting to such a system. I guess if one is still running their business on card stock and post it notes there might be an issue, but if that’s the case I think those business owners might find they have larger problems to address than monitoring a sick leave policy.

Of course such infrastructure isn’t free and the cost of it will come out of employee pay as much as any other bucket. Also since such infrastructure has a baseline cost for purchasing and managing it smaller employers will have a harder time since they have few people to spread the costs over. It isn’t like this is the only requirement and no single one might be too much to deal with but the phrase “Death by a thousand cuts” comes to mind.

Regulations like this is a big reason we have fewer local businesses and more chains. Owner operators have a hard time navigating the myriad of various legal hoops they need to jump through. It also is a big motivation behind the companies like Uber and the increasing ranks of freelance and independent contract labor.

If the prevailing trend in all business, small or otherwise was not toward such infrastructure that makes data collection such as this a negligible difference. As it is, your point is meaningless, your market has spoken, and in this matter tilts in favor of easy data gathering and simplified accounting practices, making implementation of this policy not that terribly difficult for virtually everyone.

Prevailing trends are not universal and still tilt the playing field. The prevailing trends in regulation are a major reason that chains are supplanting owner operators. Also it isn’t just the collection but the effort of documenting and dealing with compliance issues. Also, just because you wish the costs involved in these things were “insignificant” doesn’t make it so.

Actually, the chains are moving in because of economy of scale, not because of regulation. Large chains can buy in large quantities and dictate terms to their suppliers, demanding lower prices. Small mom & pop stores have to take whatever price the wholesaler offers them.

Compared to that, any regulations aren’t anything more than a small line item on the balance sheet.

What are the penalties for businesses if they don’t comply? Who is going to legislate disputes (which surely will happen)? What legal branch will defend workers? Will the city/state pay for businesses legal fees if they win in arbitration vs city worker?

Typical 1/2 baked idea thrown on top of businesses to make it more difficult to employ folks and make a living…. Good luck Minneapolis…

So everyone in Minneapolis loses 6 vacation days next year and gains 6 sick days. What about jobs where hours aren’t kept track of (such as salaried?). This is going to create a huge mess of unnecessary paperwork. Give people their vacation days back.

How does Minneapolis get jurisdiction over people working in the city if their employees is not based there? How do they plan on measuring the number of hours, for instance, truck drivers passing through the city spend within the Minneapolis boarders to understand if/when they reach the 80 hour threshold? If they somehow managed that how do they enforce the law if the business is based in St. Paul much less Hudson?

As someone fortunate enough to be on the plus side of the rich/poor income divergence of the past 30 years I have always felt that the commitment to Social Security and Medicare should not be a continual fight and should not be a target for retrenchment on our commitments: holding true on not increasing retirement ages, reducing benefits or requiring more private “bridge ” policies to attain basic health card needs for seniors. And those who have been on the plus side of income divergence need to shoulder the majority of this through various tax and SS contribution increases on income they have earned. And that is the key element: earn money then pay taxes. The Minneapolis sick leave provisions essentially levy a tax on income that might be earned and if it is not, too bad payment is required anyway. It is not fair or logical; but, it is not surprising from Bike Lane Betsy and her co-conspirators who are greatly offended when some groups are stereotyped into a single class, yet will without hesitation do the same to another: “You’re a business owner, you must be rich”.

As a small business owner with just under 50 employees working in the food service industry, this law, combined with overtime limit changes and minimum wage hikes, will require us to cut two FTEs, eliminate free food for employees, and slightly raise prices. We won’t wait until it goes into effect either since we want time to adjust, so we’ll be implementing these changes by the end of September 2016.
Congratulations to Minnesota lawmakers for being at the forefront of reducing employment in the state.